Google pulls the plug on internal Stadia game development studio

The fledgeling cloud gaming service, Google Stadia, has dealt a huge as Google announced on Monday that it’s shutting down the division of Stadia that was dedicated to making exclusive games.

“Given our focus on building on the proven technology of Stadia as well as deepening our business partnerships, we’ve decided that we will not be investing further in bringing exclusive content from our internal development team SG&E, beyond any near-term planned games,” Stadia vice president and general manager Phil Harrison said in a statement, according to Bloomberg.

The disbanding of the Stadia Games and Entertainment team has apparently done due to the whole endeavour being costlier than anticipated. 

“Creating best-in-class games from the ground up takes many years and significant investment, and the cost is going up exponentially,” Harrison said, according to PC Mag.

Now, rather than rival the video game industry’s big players such as Sony’s PlayStation or Microsoft’s Xbox, Stadia will partner with them. Harrison said the division would expand “our efforts to help game developers and publishers take advantage of our platform technology and deliver games directly to their players.” Stadia will continue to provide titles from other developers, but Google’s original plan of supplementing them with its own slate of games will not work out.

Stadia, which launched in November 2019, is a cloud gaming service developed by Alphabet Inc.’s Google to take on the video game console giants with a platform of its own. Stadia allows users to play games on Android phones and Chromecast apps for TV, Unlike traditional consoles, by funnelling data directly from Google’s server clusters. According to the American tech giant, the goal was to reach well beyond the audience of traditional gamers and especially penetrate markets such as China and India, where many people cannot easily afford or access a costly PS or Xbox.

For any game platform, first-party titles are critical to stand out and attract new users. (Imagine Microsoft’s Xbox without Halo, for example.) So the announcement by Google is raising concern that the company is eventually going to abandon Stadia.

However, Harrison says the cloud gaming service isn’t going anywhere. “You can continue playing all your games on Stadia and Stadia Pro, and we’ll continue to bring new titles from third parties to the platform,” he says. “We’re committed to the future of cloud gaming, and will continue to do our part to drive this industry forward.”

According to a report by gaming news site Kotaku, about 150 people will lose their jobs as part of the reorganization plans, which include shutting offices in Montreal and Los Angeles. However, Google will try to place them elsewhere. “We’re committed to working with this talented team to find new roles and support them,” Harrison said in the statement.

As part of the restructuring, the head of SG&E, video game producer Jade Raymond, formerly of Electronic Arts Inc., is leaving Google, Harrison informed in the statement.